The oil industry has struggled to revive its reputation after gas prices spiked to $4 per gallon and the Senate Judiciary Committee in May 2008 grilled the top five oil company CEOs -- some of API’s most powerful members -- over their multimillion-dollar earnings. Soon after the hearing, API's longtime lobbying force, President Red Cavaney, retired, making way for Gerard to take the helm. | REUTERS

Oil group lays off 15% of its staff

The American Petroleum Institute terminated an estimated 40 employees, or about 15 percent of its staff, Thursday as the final part of the trade group’s reorganization, President Jack Gerard told POLITICO.

“I believe this reorganization will reinvigorate API,” Gerard said. “We looked at the entire institute and reviewed skill sets and refined which skill sets are needed.”

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A source close to API employees said some of the affected workers had resigned, and severance pay was available for those who were laid off. And from a glance at their Twitter status updates, it seems that some expected the cutbacks.

“Grrr, just let this be over already,” one API employee tweeted Wednesday. Thursday, her status read: “D-day has arrived.” And later: “Heading home because I no longer have a job.”

Since Gerard took the helm more than a year ago, he has worked to transform the group’s reputation from a corporate, Republican-heavy movement led by Big Oil to a bipartisan and nimble grass-roots operation. The goal: to strengthen its pull in the Democratic-controlled Congress.

Gerard described the pre-holiday layoff as the last portion of his restructuring plan. Money woes, which have plagued some trade associations during the economic slump, were not the reason for API’s cutbacks, he said. The organization’s budget is in good shape, and most of the positions will be refilled, albeit with employees with different specialties. Over the summer, the group reduced the size of its board to optimize efficiency.

The trade association has a large advocacy arm, as well as certification, training and other departments. But Gerard said Thursday’s cuts were across the board and didn’t focus on any specific department.

“I took over at a very challenging time,” Gerard said, noting the push to pass climate change legislation. “I think we’re making incremental progress, but as we look at this in the long haul, I think we’re really turning a corner.”

When the Democrats took power of Congress and the White House between 2006 and 2008, the voice of Big Oil consistently shrunk from the priority seat it had held with Republican leaders.

The industry has been especially struggling to revive its reputation after gas prices spiked to $4 per gallon and the Senate Judiciary Committee in May 2008 grilled the top five oil company CEOs — some of API’s most powerful members — over their multimillion-dollar earnings. Lost amid the sharp barbs from senators was the fact that the industry indirectly provides more than 9 million jobs in the nation.

Soon after the hearing, API’s longtime lobbying force, President Red Cavaney, retired, making way for Gerard to take the helm.

Gerard is known as a master restructuring expert: He previously reorganized American Chemistry Council and the National Mining Association, two industries that also are working to reverse their reputations with Democratic lawmakers.

Among the changes Gerard introduced were partnerships with labor groups that have good access to the Democrats.

Gerard’s changes came too late to have much influence on the House global warming negotiations. The organization opposed the final House bill, which tilted heavily against API members. Now the group is urging the Senate to make significant changes to the bill.

Gerard says Thursday’s cuts and the broader restructuring go beyond the congressional debate over energy legislation. Rather, they are aimed at putting the organization in a better position to compete and advocate in the new century.

“Frankly, this has nothing to do with climate change and nothing to do with Copenhagen,” Gerard said. “Our priority is where our membership wants us to focus our attention and resources: that’s advocacy” on a host of issues and debates in Washington.